Two years ago today, the Supreme Court ordered U.S. EPA to reconsider its decision not to regulate for greenhouse gas emissions.

President George W. Bush quickly responded, saying he would take the opinion "very seriously." Speaking to reporters in the White House Rose Garden, he said, "It's the new law of the land."

But Bush never allowed EPA to act -- punting all critical next steps to his successor.

And now, time's up. President Obama's EPA will make its first formal response to the April 2007 opinion by proposing an endangerment finding that links man-made greenhouse gases to threats to public health and welfare. Administrator Lisa Jackson's proposal won't mean immediate regulation, but it will still prompt a vigorous debate over global warming policy likely to put the new administration on the defensive against well-organized opposition.

"It's a big deal politically, it's a big deal legally," said Jeff Holmstead, an industry attorney and Bush's EPA air chief. "If they were to finalize the endangerment finding, it puts EPA in the middle of regulating something that just swamps everything else they've ever done."

Indeed, the Obama administration finds itself cornered. The president will no doubt be mindful that EPA climate regulations begin in the midst of the deepest global economic crisis since the Great Depression. But after campaigning against Bush's environmental record, Obama must be careful that he not be seen as dictating policy from the White House.

"EPA must follow the law and conduct a science-based analysis to determine whether or not there was any effect on public health or welfare," said Ben LaBolt, a White House spokesman. "The president has been consistent in saying that science needs to guide the process, and he has been a defender of the science on climate change."

If Obama had his way, he would defer on EPA regulations and let Congress do its work on climate legislation. That is a stance that nearly everyone working on a greenhouse-gas emissions bill agrees on, with some hoping EPA can even give legislative efforts a boost against stiff opposition from Republicans and many moderate and conservative Democrats.

"Hopefully, it gives people a dose of reality that we have to have this done or wake up to a harsh tomorrow," said Rep. Jay Inslee (D-Wash.). "I think it's preferable to have Congress working its will and trying to find a consensus. But one way or another, the energy crisis isn't going to wait. Nor will the regulations."

To prompt interest among reluctant lawmakers, Democratic leaders of the House Energy and Commerce Committee this week released a draft energy and climate bill that takes away perhaps the most threatening of EPA's potential regulations.

The proposal by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) prohibits EPA from classifying carbon dioxide with "conventional" air pollutants -- including ground-level ozone, fine particulate matter, carbon monoxide, lead, sulfur dioxide and nitrogen dioxide. If EPA takes that approach, it arguably would be free to impose sweeping greenhouse gas controls across the economy.

But it is unclear if this move will work. Rep. Greg Walden (R-Ore.), for example, said in an interview yesterday that he does not support cap-and-trade legislation, and he is reluctant to vote for a climate bill even with the threat of EPA regulations hanging over the country.

"It's a club," Walden said. "Either you vote for this or you get that. They've got both hammers, and every lever of the legislative process and the executive process. They own all the tools in the chest."

Plan B if Hill 'fails to act'

EPA sent its proposed endangerment finding to the Office of Management and Budget almost two weeks ago. And according to an internal EPA document obtained by E&E, OMB wants to wrap up its review by April 10.

Jackson then would sign the document April 16, six days before the Obama administration's first Earth Day. It is also well-timed to precede Waxman's committee hearings on the global warming and energy bill. The Energy and Commerce Committee leadership is pushing to vote on the bill before Memorial Day.

"It's amazing how fast they move, isn't it?" Rep. Charles Gonzalez (D-Texas) said of the Obama EPA. "And I understand the previous administration didn't help things along. But the thing is, let's legislate. Let's do this with 435 members having to vote for it. That's what we are represented to do. We surely are more representative in the most democratic traditions than the EPA."

Despite some optimistic members of Congress, there are many questions about whether lawmakers can move a climate bill this year.

Senate Majority Whip Dick Durbin (D-Ill.) this week acknowledged he is short of the 60 votes needed to pass cap and trade through regular order. And more than two dozen Democrats joined with Republicans yesterday to effectively kill any chance of moving climate legislation without overcoming a filibuster.

Which brings the issue back to EPA.

Obama faces a December deadline for international climate negotiations in Copenhagen, and the rest of the world is expecting the new president to present a far more aggressive U.S. position than his predecessor. Sources tracking the debate say EPA regulations may end up being Obama's diplomatic trump card absent a final cap-and-trade law.

"I feel good that we're at this stage, but now the regulatory stuff has specific purposes," said David Bookbinder, an attorney at the Sierra Club. "It gives the president credibility at Copenhagen. It is the backup if Congress fails to act."

By Copenhagen, EPA is likely to have completed an endangerment finding that covers both welfare and public health. It is an important dual designation that could give the agency greater leverage to set more stringent regulations, Bookbinder said.

The Bush administration focused only on welfare and the links between greenhouse gases and visibility, weather, crop damage and soil. Expanding to public health, EPA plans to make connections between climate change and everything from temperatures to air quality and expanded ranges of vector-borne and tick-borne diseases.

Industry groups are concerned that EPA's actions would prompt an avalanche of regulations -- even as agency lawyers and environmental groups make the case that the rules would be carefully coordinated.

"If they're going to play chicken, they're doing it at a really bad time," said Bill Kovacs, vice president of environment, technology and regulatory affairs at the U.S. Chamber of Commerce. "We need to focus on the economy and not worry about other issues."

Holmstead said the Obama EPA's reliance on certain scientific findings may be pushing too far.

"The endangerment finding that was circulating during the Bush years was much more conservative about predicting the future impacts of climate change than the proposal from the Obama administration," Holmstead said. "Based on the document that was leaked, they're pretty aggressive about the health impacts from climate change. They make some representations that I think a lot of folks might be uncomfortable with."

Environmental groups counter that EPA action is long overdue -- and they will take the emission reductions that follow wherever they can get them.

"The Clean Air Act required this decision to be made 10 years ago," Bookbinder said. "We're a decade too late, thanks to the Bush administration. And the Clean Air Act and science lead us to a very simple conclusion that yes, greenhouse gases are reasonably anticipated to endanger public health and welfare. This is a no-brainer."